Canada warned of its lowest barley harvest for decades, "historically low" wheat stocks, and support for prices of canola and oats as it unveiled its first official estimates of the devastation caused by a sodden spring.
Canada's farm ministry has, in a long-awaited report, cut its estimate for the country's wheat sowings by 13% to 9.1m hectares, which would be their lowest for 36 years on US archive data.
With wheat production falling in line, inventories at the end of 2010-11 would fall to among their lowest ever levels, of 5.0m tonnes, as the demand for higher quality grain kept exports firm.
"The world supply of high protein wheat is expected to decrease, mostly because of the lower Canadian supply," the ministry said.
Firm prices
Barley output was on track to fall by 18% to 7.8m tonnes, potentially the "smallest crop in nearly 50 years", while a rise in oats production that had been expected was no longer on the cards.
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Canada wheat estimates 2010-11, change on previous, (and on 2009)
Sown area: 9.22m hectares, -210,000 hectares, (-8.2%)
Harvested area: 7.89m hectares, -1.20m hectares, (-17.3%)
Production: 20.90m tonnes, -3.32m tonnes, (-21%)
Exports: 15.90m tonnes, -1.7m tonnes, (-11.1%)
End stocks: 5.00m tonnes, -700,000 tonnes, (-30%)
Source: AAFC |
Ministry statisticians slashed by 23% to 2.5m tonnes their forecast for production of oats, of which Canada is the world's only major importer.
"This, in combination with forecasts that the US is expected to produce its second smallest oats crop, will strongly support oat prices in Canada," the report said.
Canola prices, which have risen by more than 15% in Winnipeg since fears for the wet spring were sharpened a month ago by a Canadian Wheat Board report, will average Can$20 a tonne higher than in 2009-10 as "support from tight supplies more than offsets pressure from lower US soyoil prices".
Canada's production of the rapeseed variant was on track for an 11% decline, despite significantly higher sowings, as flood damage prompted farmers to write off fields at "sharply higher" rates.
'Extreme wet conditions'
Indeed, this was likely to be a feature of many crops, with "abandonment expected to be significantly above normal and average yields… below normal".
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Selected crop estimates 2010-11, change on previous, (and on 2009)
Barley output: 7.80m hectares, -430,000 hectares, (-18.0%)
Oats production: 2.47m tonnes, -730,000 tonnes, (-11.3%)
Canola production: 10.50m tonnes, -1.2m tonnes, (-11.2%)
Canola year end stocks: 750,000 tonnes, -299,000 tonnes, (-42%)
Source: AAFC |
The caution followed "extreme wet conditions and cool temperatures across western Canada", the ministry said, warning temperatures and rainfall remained "main factors to watch".
The woes in Canada, historically the world's second largest wheat exporting country, provoked sharp rise in US grains a month ago, following the CWB's warning, a rally which has been given extra legs by fears for crops in Europe and the Black Sea states.
The US Department of Agriculture will later on Friday unveil its latest benchmark monthly report on global crop supply and demand estimates.
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